Economic Convergence: Optimism for Lohn Angleichung, Concerns over Vermögensungleichheit
The President of the Leibniz Institute for Economic Research Halle (IWH), Reint Gropp, expresses optimism that wage disparities between East and West Germany will be reconciled within the next decade. In an interview with Mitteldeutscher Rundfunk (MDR), Gropp stated, "I do not believe that we will still have such a significant wage gap in ten years." He attributes this to demographic trends.
However, the situation differs regarding Vermögensungleichheit (wealth inequality). West Germans have had decades more time to accumulate wealth. "The wealth inequality is truly a significant problem, as it influences factors such as business start-ups and an individual’s willingness to take risks," Gropp explains.
Gropp opposes targeted economic development programs specifically for East Germany. He believes a more effective approach lies in focusing on research and universities. "There are simply fewer large corporations, resulting in less private research and development," he notes. In this regard, the East deserves greater attention.
"However, I am against giving special attention beyond that," emphasizes the IWH President. "I am also in favor of abolishing the position of the Eastern Commissioner because I believe that East Germany needs to shed its victim mentality."
Demographic Shifts Driving Lohn Angleichung
Demographic factors are expected to play a crucial role in bridging the wage gap. The aging population in East Germany is leading to a decline in the labor force, while immigration is increasing the supply of workers. This creates a situation where employers need to offer higher wages to attract and retain employees in the East.
Additionally, the increasing mobility of workers between East and West has fostered competition for qualified personnel. This has put pressure on employers in both regions to raise wages.
Persistence of Vermögensungleichheit
Despite the progress in wage convergence, Gropp acknowledges that wealth inequality remains a challenge. The accumulated wealth advantage of West Germans over several decades is difficult to overcome in a short period.
Moreover, differences in investment opportunities and business ownership rates contribute to the wealth gap. West Germans have traditionally had greater access to capital and established businesses, giving them an advantage in accumulating wealth.
Addressing Vermögensungleichheit: Focusing on Opportunities
Gropp advocates for policies that foster equal opportunities for wealth creation. Investing in education and skills training can equip individuals in the East with the knowledge and abilities needed to succeed in the labor market and start businesses. Additionally, policies that promote investment and business formation in the East can create a more level playing field for wealth accumulation.
Beyond East-West Divide: Embracing a National Perspective
Gropp stresses the importance of moving beyond the divide between East and West Germany. He believes in a national perspective that focuses on addressing economic and social challenges across the country.
By fostering a sense of unity and shared responsibility, Germany can create an environment that promotes economic growth and equal opportunities for all. Abolishing the position of the Eastern Commissioner symbolizes this transition, signaling that East Germany is no longer in need of special attention but is an integral part of the nation.
